Domestic cement despatches decline by 13.73pc in August

Slower growth was attributed to the hectic election activities that were going on in the country.

ISLAMABAD: Exports were the saving grace for Pakistan’s cement industry in August as the domestic consumption plummeted by a massive 13.73 per cent, which in fact was the first such decline in consumption in the last three years.

Domestic cement despatches in Pakistan was 2.895 million tons out of which 2.326 million tons was despatched by mills located in the northern parts of the country and 0.569 million tons by the south based mills.

During the corresponding month of last year, the north zone despatched 2.730 million tons of cement and south based mills despatched 0.625 million tonnes. Cement exports, on the other hand, increased by 35.82 per cent as 0.557 million tons of cement was exported against 0.409 million tons exported in August 2017.

Domestic cement despatches in the first two months of current fiscal declined by 5.31 per cent. In the north zone, cement despatches declined by 8.80 per cent while in the south zone it declined by 10.91 per cent. However, exports despatches in the north zone declined by 29.66 per cent while in the south zone it grew by 158.40 per cent.

The abrupt decline in domestic cement uptake has taken the cement manufacturers by surprise. The All Pakistan Cement Manufacturers’ Association (APCMA) spokesman said that the industry was expecting a slower growth as witnessed a month earlier but never expected negative growth.

“This might be due to change in the government as the pace of ongoing development projects get affected in the process, as private sector construction of houses seemed to be normal,” he added expressing hope that this was a one-off decline and the growth would gather pace in the coming months.

“The industry is worried because they have made tremendous investments to increase capacity that has now crossed 50 million tons a year. This expansion was made on the assumption that construction activities would continue to grow at a rapid pace in the long term,” the spokesman added.

He said the manufacturers were not worried when the domestic cement despatches grew by a little over 4 per cent in July 2018. He said slower growth was attributed to the hectic election activities that were going on in the country. He said things should have normalized in August and it is a matter of great concern for the industry that it did not.

He said that in July 2018, the overall growth in the industry was 5.1 per cent while in August 2018, the overall growth was negative at 8 per cent. He said in the first two months of this fiscal the industry recorded a negative growth of 1.98 per cent. He said, “The industry is still hopeful of a rapid turnaround as the new government has promised to construct one million new houses every year. Once this program is energised, the growth would accelerate”, he added.

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